Tuesday, February 04, 2014

Sport Stats

Abstract:
We assembled National Basketball Association and Major League Baseball player performance data from recent years, tracking 3 year periods in players’ careers: pre-contract year (baseline), contract year (CY; salient external incentive present), and post-contract year (salient external incentive removed). In both sports, we examined both individual scoring statistics (points scored, batting average) and non-scoring statistics (e.g. blocked shots, fielding percentage) over the 3 years. Using extrinsic motivation theories, we predicted and found a boost in some scoring statistics during the CY (relative to the pre-CY), but no change in non-scoring statistics. Using intrinsic motivation theories, we predicted and found an undermining of many statistics in the post-CY, relative to both the CY and the pre-CY baseline. Boosted CY scoring performance predicted post-CY salary raises in both sports, but salary raises were largely unrelated to post-CY performance. The CY performance boost is real, but team managers should know that it might be followed by a performance crash — the CY “syndrome.”

Abstract:
We test for a 'hot hand' (i.e., short-term streakiness in performance) in Major League Baseball using panel data. We find strong evidence for its existence in all ten statistical categories we consider. The magnitudes are significant; being 'hot' corresponds to roughly a one quartile increase in the distribution. Our results are in notable contrast to the majority of the hot hand literature, which has found little to no evidence for a hot hand in sports, often employing basketball shooting data. We argue that this difference is attributable to endogenous defensive responses: basketball presents sufficient opportunity for defensive responses to equate shooting probabilities across players whereas baseball does not. As such, prior evidence on the absence of a hot hand (despite widespread belief in its presence) should not be interpreted as a cognitive mistake -- as it typically is in the literature -- but rather as an efficient equilibrium adjustment. We provide a heuristic manner for identifying a priori which sports are likely to permit an equating endogenous response response and discuss potential implications for identifying the hot hand effect in other settings.